Alaska lawmakers land on $1,100 PFDs, Dunleavy calls another special session

Man at table wearing a tie and outdoor vest
Gov. Mike Dunleavy talks with reporters on Tuesday in the cabinet room in the Capitol. He discussed several issues related to the end of the third special session of the year. He called for a fourth special session later in the day. Dunleavy spokesperson Jeff Turner is on the left. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)

Alaskans will receive a permanent fund dividend of $1,100, but lawmakers aren’t done talking about it yet. 

Gov. Mike Dunleavy called the Legislature into a fourth special session starting on Oct. 1. He issued the call on Tuesday after the Legislature passed a bill setting the PFD amount for this year. 

The Permanent Fund Dividend Division estimates PFDs could be paid in roughly 30 days, which would make them slightly later than the usual early October payment. 

Supporters of the $1,100 dividend amount said it is the most the state can afford and still follow a law that limits what the state can draw from permanent fund earnings each year.

A majority of senators who voted on the bill on Tuesday supported a larger PFD, of $2,350. But the Senate settled for the lower amount after House Speaker Louise Stutes announced that the House wouldn’t hold a floor session. 

Essentially, lawmakers ran out of time ran out of time. Legislative rules require that lawmakers have a day to consider bills. If the Senate sent a bill over to the House that was different from what the House passed, the session would have ended before the House could have voted on it. This rule can be set aside if two-thirds of a chamber agree to it, but Stutes said there weren’t enough votes to do that. 

Dunleavy put one item on the next special session agenda — a bill or bills to address a fiscal plan. He also said that he wants the Legislature to pass what he called “the rest of this year’s PFD.” He said the $1,100 amount was a “partial PFD.”

Earlier in the day, Dunleavy told news reporters that the Legislature should take responsibility for not passing a plan to balance the budget. 

“At what point does this Legislature behave like a Legislature is supposed to, and come up with ideas to solve the plan?” Dunleavy said. “Because right now, it appears that the only idea is to do nothing and have no result.”

Stutes, a Kodiak Republican, said “the majority if not all” of her caucus is interested in taking action on a long-term plan. The House majority has 15 Democrats, four independents and two Republicans, including Stutes.

“I am interested in a solid fiscal plan, so we’re not facing this PFD fight every year — it’s just craziness,” she said. “We need to come together as a body, and we need to come together as a Legislature, and resolve these issues.”

Stutes has expressed concern that Dunleavy’s proposals do not close the gap between what the state spends and what it brings in over the next decade. 

During the Senate floor debate, Wasilla Republican Sen. Mike Shower proposed paying $3,800 dividends. He wanted to follow a formula for calculating the annual payments that the state used for decades until 2015, after oil prices crashed.

“I believe that we should do the right thing. I believe we should help our citizens with our money,” he said. “And I believe it is appropriate to do so until this Legislature changes the statute.”

But Shower’s proposal would require that the Legislature spend $2.5 billion more from permanent fund earnings than it already has. Opponents say that once the Legislature starts to draw more than planned from permanent fund earnings, it won’t stop until there are no earnings left. 

Fairbanks Republican Sen. Click Bishop said a higher dividend would help the state’s economy for four or five months. But he said staying within the planned draw would allow the permanent fund to continue to grow for future generations. And that would extend the benefits of the state’s oil wealth after the state’s economy no longer relies on oil. 

“Keep in mind that we want to preserve our reservoir, to keep our founding fathers’ vision intact so they pump into perpetuity,” he said. “How we get there: That’s the debate.”

Legislative budget negotiators first tried to pass a budget with a $1,100 dividend in June. 

But the proposal ran into problems. Most of the money wasn’t available after legislators couldn’t agree on spending the money to fund it. Dunleavy vetoed the rest. 

During the special session that just ended, Dunleavy asked the Legislature to consider his proposals to amend the state constitution to include the PFD and to lower the limit on state spending. 

He later added the bill to fund dividends and other items. He supported a dividend of $2,350, which is half of the amount lawmakers draw from permanent fund earnings each year. 

The special session ended with another major issue left unresolved. A bill that aimed at easing the strain on hospitals from the COVID-19 surge died in the House. The bill would have increased access to telehealth care and temporarily eased some rules that hospitals have to follow. But it became stuck in a dispute over an amendment to the bill that hospital advocates said would make things worse. 

The amendment would have required all patients to be able to have a person who supports them present during any treatment. Hospitals have had some restrictions on visitors at some points during the pandemic, in order to reduce the spread of the coronavirus among patients and hospital staff. 

The Senate also started to debate amendments to a bill that would change the PFD formula. It would increase the dividend to $1,300 over three years, then make it half of the draw if the state adds $700 million in taxes or other revenue to both balance the budget and pay for higher dividends. The bill could be debated more during the next special session. 

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